DraftKings Said to Be in Talks to Buy Prediction Market Firm Railbird

• Rumor surfaces three months after DraftKings pulled prediction markets application
• DraftKings has history of using acquisitions to enter new arenas
• Rival FanDuel is said to have had partnership talks with Kalshi

DraftKings (NASDAQ: DKNG) is rumored to be in discussions regarding a potential takeover of upstart prediction markets operator Railbird.

Front Office Sports broke the news on Monday. The speculation surfaces about three months after DraftKings yanked an application with the National Futures Association (NFA) that, had it been approved, would have set the stage for the gaming company to enter the fast-growing prediction markets space. The Boston-based sportsbook operator issued a statement to Front Office regarding the rumor.

DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions,” according to the response.

New York-based Railbird last month won approval from the Commodity Futures Trading Commission (CFTC) to operate as a contract market platform in the US. The company was founded in 2021 by Miles Saffran and Edward Tian, both alumni of Point72 Asset Management, the family office run by New York Mets owner Steven Cohen.

DraftKings Doesn’t Shy Away from Acquisitions

DraftKings, which itself is a relatively young company and even more youthful in publicly traded form, has frequently used acquisitions to enter new, rapidly growing frontiers.

That deal was followed by the gaming company’s purchase of Simplebet Inc., a provider of microbetting services, last August. DraftKings’ ownership of Simplebet positions the parent company to benefit from what many industry observers believe will be a long-term boom in live or in-game betting.

Those are just two examples of DraftKings using acquisitions to bolster its product portfolio. It remains to be seen, but Railbird could be next, potentially allowing DraftKings to ward off competitive threats from firms such as Kalshi and Polymarket while entering coveted markets such as California and Texas.

Railbird Has Noteworthy Investor Roster

Railbird secured initial funding through the Winter 2022 Y Combinator accelerator program. Y Combinator matches startups with experienced investors, mentors, and venture capitalists. The prediction markets operator is backed by SeatGeek’s Jack Groetzinger and multiple venture investors.

Railbird is classified as a fast-growing company by Crunchbase, and the research firm is pinning the odds of Railbird receiving another funding round over the next six months at 86%.

Perhaps adding to the intrigue surrounding the DraftKings takeover rumor is the fact that Crunchbase describes Railbird Exchange as a “likely” acquisition target.